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Lending in May at highest level for more than four years


Published: 3 July 2013 | Author: Bernard Clarke

Gross mortgage lending rose to £14.7 billion in May, the highest monthly estimate since October 2008, when the onset of the financial crisis began to bear down on market activity. Estimated lending in May was 21% higher than the £12.2 billion advanced in April and 17% higher than the total of £12.6 billion in the same month last year. 

In the market commentary we published alongside the estimated total of gross lending for May, we noted that funding conditions, supported by the Bank of England’s funding for lending scheme, continue to look favourable and are helping to sustain more competitive mortgage pricing and availability and a gradual restoration of lenders’ risk appetite.

May’s estimated lending total implies somewhat stronger house purchase activity than we had been expecting, and is consistent with more positive housing market surveys from bodies like the Royal Institution of Chartered Surveyors. It is also possible that activity in May reflects some pent-up sales, following the extended spell of poor weather earlier in spring.

May’s lending estimate appeared against the backdrop of a modestly improving UK economy, albeit one that appears to rest on a pick-up in consumer spending and a recovering housing market.